New Jersey: what each business structure costs a year
At $100,000 profit, an LLC taxed as an S corp costs $3,302 a year less than a sole proprietorship in New Jersey. All figures are 2026 tax and fees.
$3,302 a year
less as an LLC taxed as an S corp than as a sole proprietorship in New Jersey, at these numbers. That includes the state's pass-through entity tax election.
New Jersey, 2026: $100,000 profit, single filer
| Structure | Yearly cost | vs yours | To set up | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Sole proprietorship yours | $26,095 | $0 | |||||||||||||||||||
Itemized: $26,095
| |||||||||||||||||||||
| Single-member LLC | $26,143 | +$48 | $100 | ||||||||||||||||||
Itemized: $26,143
| |||||||||||||||||||||
| LLC taxed as an S corp lowest | $22,793 | −$3,302 | $100 | ||||||||||||||||||
Itemized: $22,793
| |||||||||||||||||||||
| S corporation | $22,793 | −$3,302 | $100 | ||||||||||||||||||
Itemized: $22,793
| |||||||||||||||||||||
| C corporation | $31,491 | +$5,396 | $100 | ||||||||||||||||||
Itemized: $31,491
| |||||||||||||||||||||
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What these figures count
- State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
- Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
- The 20% qualified business income deduction with its income limits and the professional-service rule.
- Yearly report fees, and a cost you can change for payroll and the business tax return.
Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.
When an S corp election pays in New Jersey
Electing S corp tax treatment for an LLC starts to pay in New Jersey at about $57,500 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.
An S corp in New Jersey can elect to pay the state's income tax itself, a pass-through entity tax of 5.675% to 10.9%, and the owner gets a credit for it. The company deducts it on the federal return, so it is not held to the SALT cap. The calculator uses it when it lowers the totalnj.gov.
| Profit | Sole prop | LLC | LLC as S corp | C corp |
|---|---|---|---|---|
| $30,000 | $5,581 | $5,639 | $8,182 | $8,576 |
| $50,000 | $10,752 | $10,806 | $11,759 | $13,896 |
| $75,000 | $17,798 | $17,852 | $15,565 | $21,446 |
| $100,000 | $26,095 | $26,143 | $22,793 | $31,491 |
| $150,000 | $44,297 | $44,346 | $38,292 | $53,531 |
| $200,000 | $63,081 | $63,135 | $54,614 | $74,739 |
| $300,000 | $108,060 | $108,083 | $89,221 | $118,717 |
Single filer, no other income, revenue taken as 1.5 times profit, default salary. The lowest cost in each row is marked.
State fees and taxes in New Jersey
| LLC | Corporation | ||
|---|---|---|---|
| Filing to form | $100Public Records Filing for New Business Entity (Certificate of Formation) | $100Public Records Filing for New Business Entity (Certificate of Incorporation) | nj.gov |
| Yearly report | Annual Report, $75 a year | Annual Report, $75 a year | nj.gov |
| Report due | Last day of the anniversary month of formation | Last day of the anniversary month of incorporation | |
| New Jersey S corporation minimum tax (CBT)by a table of gross receipts | if taxed as S corp | S corp only | nj.gov |
| New Jersey corporate transit fee2.5% of net income, none up to $10,000,000 | no | C corp only | nj.gov |
- New Jersey taxes personal income in 7 brackets, from 1.4% to 10.75% (2026, single filer). nj.gov
- C corporations pay 6.5% to 11.5% of net income, with a minimum of $500. nj.gov
- New Jersey follows the federal S corp election.
- New employers pay state unemployment tax of 2.683% on the first $44,800 of each employee's wages. That applies to an owner's salary from an S or C corp. nj.gov
- NJ unemployment insurance (worker): 0.383% withheld from wages up to $44,800. nj.gov
- NJ workforce development / supplemental workforce fund (worker): 0.042% withheld from wages up to $44,800. nj.gov
- NJ temporary disability insurance (worker): 0.19% withheld from wages up to $171,100. nj.gov
- NJ family leave insurance (worker): 0.23% withheld from wages up to $171,100. nj.gov
- Formation fee cut from $125 to $100 on July 1, 2026. LLCs taxed as partnerships with more than two owners also pay a $150 per owner partnership filing fee (NJ-1065); single-member LLCs do not.
Not in the calculator: Newark charges employers a 1% payroll tax on wages for work in the city, and Jersey City charges 1% on gross payroll (non-resident employees, quarterly payroll of $2,500 or more). Partnerships and S corporations can elect the Pass-Through Business Alternative Income Tax (BAIT: 5.675% to $250,000, 6.52% to $1 million, 10.9% above) to get around the federal SALT cap, with a matching credit for owners.
Switching calculators for New Jersey
- Sole proprietorship vs LLC
- LLC vs S corp
- Sole proprietorship vs S corp
- S corp vs C corp
- LLC vs C corp
- Sole proprietorship vs C corp
- LLC taxed as S corp vs S corporation
- What an LLC costs in New Jersey
- Take-home pay in New Jersey
- Quarterly estimated tax in New Jersey
By profession in New Jersey
- Management consultant
- Software developer
- Graphic designer
- Photographer
- Real estate agent
- Insurance agent
- Financial advisor
- Therapist
- Physical therapist
- Nurse practitioner
- Physician
- Dentist
- Lawyer
- Accountant
- Freelance writer
- Web developer
- Marketing consultant
- Electrician
- Plumber
- General contractor
- Truck driver
- Hair stylist
- Personal trainer
- Rideshare driver
Questions
Is an S corp worth it in New Jersey?
On these figures, from about $57,500 of profit. At $100,000 an LLC taxed as an S corp costs $22,793 a year against $26,143 for a plain LLC, $3,350 less. The saving comes from paying Social Security and Medicare tax on a salary instead of on all profit.
How much does an LLC cost per year in New Jersey?
The state charges Annual Report, $75 a year. Forming one costs $100.
Does New Jersey recognise the S corp election?
Yes. New Jersey needs its own S election form. A corporation (or LLC taxed as a corporation) must file Form CBT-2553 and receive approval to be an NJ S corporation; otherwise it is taxed as a C corporation under CBT. NJ S corporations pay the minimum tax.
What income tax does New Jersey charge?
New Jersey taxes personal income in 7 brackets, from 1.4% to 10.75% (2026, single filer). C corporations pay 6.5% to 11.5% of net income, with a minimum of $500.
How this page models New Jersey (1)
- New Jersey's CBT taxes all entire net income at a single rate set by its size (6.5% at $50,000 or less, 7.5% up to $100,000, 9% above), but the page models it as marginal brackets, so the figure is approximate for corporations just above $50,000 or $100,000.
Sources checked 2026-10-23. Each figure links to the state or IRS page it comes from.
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